Qualcomm said Monday it was open to further talks with computer chipmaking rival Broadcom if the Singapore-based firm is willing to raise the price of its hostile bid.
The California-based mobile chip giant released a letter to Broadcom saying that a meeting earlier this month had addressed some of Qualcomm’s concerns but that the two sides remained in disagreement on price.
Last week, Broadcom reduced its offer to $79 a share, which would still be the largest-ever deal in the tech sector if completed at an estimated value of nearly $117 billion.
Broadcom said it cut its bid because Qualcomm had effectively agreed to ‘transfer’ value by raising its takeover offer for Dutch-based tech firm NXP.
Qualcomm chairman Paul Jacobs said the two companies should meet to consider a higher price.
‘Having now addressed the regulatory and certainty issues in principle, we propose arranging a meeting – as soon as mutually convenient for both parties – focused on price, should Broadcom be willing to engage on the topic,’ Jacobs said in the letter to Broadcom chief executive Hock Tan.
Jacobs said Qualcomm was willing to sign a non-disclosure agreement that would allow Broadcom to view confidential business information from its US rival, suggesting this would enable Broadcom to get a better picture of Qualcomm’s true value.
‘We appreciate that we have differences in our views on value and that ours is based upon significantly more information than the public data you now have at your disposal,’ Jacobs said.
Any tie-up of the two giants could reshape the fast-evolving sector of chips for smartphones and connected devices. But it would have to pass regulatory muster in several countries.
Qualcomm has cited ‘regulatory risk’ as a factor in rebuffing the Broadcom bid but has also said the offer ‘undervalues’ Qualcomm in view of its prospects in mobile technology.
Responding to the letter, Broadcom called Qualcomm’s response ‘engagement theater’ designed to ease pressure at the US firm’s annual shareholder meeting March 6, where Broadcom is calling for new board members who would be amenable to a tie-up.
‘Qualcomm’s disingenuous process defers the question of price, even after Qualcomm’s presiding director Tom Horton last week publicly stated that the Qualcomm board views Broadcom’s proposed price as ‘not even close,” the Broadcom statement said.
‘While Broadcom repeatedly attempts genuine engagement with Qualcomm … Qualcomm has only feigned engagement.’
Broadcom’s original offer for Qualcomm came days after Tan visited the White House last November and told President Donald Trump the company would be moving back to the United States.